Targeting of “poorer people” by Clearview questioned by Commission
Clearview’s targeting of particular demographics for its life/risk products has come under fire on the first day of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services’ insurance hearings, with Senior Counsel assisting the Commission, Rowena Orr QC, alleging that the insurer focused on “poorer people” in selling its Your Insure product.
Questioning Clearview’s chief actuary and risk officer, Gregory Martin, Orr asked whether Clearview intentionally targeted its Your Insure product to people from a poorer demographic than that which the focus for the firm’s products were normally.
While Martin acknowledged that sales were geared toward those “a strata below” Clearview’s usual clients, he said that they were from a “lower but not the lowest demographic”. He said that the target audience was still people who could pay for the product and afford to keep it.
Under pressure from Orr however, Martin accepted that Clearview “now know that it is true” that the product was being sold to people who couldn’t afford it.
Orr further suggested that more affluent people were offered better value in the products sold by Clearview, with better cover being offered for less cost on bigger products and vice versa. Martin agree with this but said that this was true for most products sold in the market. He reasoned that it was easier to cover overheads with more expensive products so they could offer better value.
The Commission also looked at the sales techniques used on lower socioeconomic people. Orr pointed to a paper by Clearview entitled “Pivoting to Mid-Market”, which looked at how to reposition sales techniques to better appeal to more affluent people.
Martin said that this focused on trying to move more into approach where customers know “exactly what they’re doing and why they’re doing it” rather than the brief sales call model which often had an emotional pitch which was utilised for products geared at people with less money and less awareness of insurance.
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